Credit tips for retirees and empty nesters

What you may not realize: If you co-sign for a card or loan, it’s added to your credit report just as if it's yours. And that debt is included in your debt load if you apply for credit or a mortgage.

It can also sink your credit score. When you're using a higher percentage of your available credit, your score can go down. If you have $10,000 in available credit on your credit cards and charge $1,000 total on your cards, your utilization ratio will be 10 percent. Staying under that utilization ratio is optimum for a good credit score. However, if your adult child maxes out that co-signed card at $5,000, you're now using 40 percent of your overall available credit. And your score would likely drop.

You're also on the hook for the debt if the borrower defaults.

"I am not a fan of co-signing under almost any circumstances," says John Ulzheimer, formerly of FICO, and president of consumer education for SmartCredit.com. For empty nesters and retirees, it can be especially detrimental, he says. On a fixed income, "co-signing for a loan is like having a piano dangling on a string over your head," he says.

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